KCPO - Do only short term trading -1/3/2010

The market gone overbought and fell on last Thursday. Since it closed below the upper Bollinger Band, I would had taken out all my prior long positions. The Stochastic has not yet crossed down its 80 signal line and when it does, i would start selling. The MACD , too has not crossed down and the D+ still stay above the D-. Once all these come in place, I would move in too. The daily ADX stay flat and below the 20's signal line, so I would use the Stochastic as a confirming tool to trade for the moment.

 

The weekly chart's Stochastic has begun to hook up though it still remain negative. so is the MACD. Though 2 weeks ago, we had price closed above the upper Bollinger band, last week, price flipped again and closed back below the upper Bollinger Band. All these are not telling us anything concrete yet. But one interesting item is the weekly ADX which has now begun to rise and crossed up the falling D-, normally I would be very excited about it, but since I still do not have parallel confirmations from the other indicators, so I would want to watch for another week before deciding what to do next.

One of the gospel truth about trading is that "when we are not sure about the market, we should stand aside". The market will always be there, so what is the hurry ? For the moment, I would sell the market when the daily Stochastic crosses down its 80's signal line or the MACD crossed down its moving average. Place stop at 2609. Or I would buy again if closes above 2609 and place stop at 2603.